run rate

Run rate is a way to estimate a company's future performance based on current results. It's calculated by taking the current period's financial figures, like revenue or profit, and projecting that over a full year. For example, if a company makes $1 million in three months, the run rate suggests it could earn about $4 million annually if current trends continue. It helps businesses and investors quickly assess potential growth or identify changes, but it assumes that current performance will stay consistent, which may not always be the case due to seasonal or market variations.